What You Need to Know About Lease Terminations in Arizona

For many individuals and business owners, renting is a practical option for occupying a space. Rental properties are advantageous for people who wish to avoid maintenance and repair bills, and there is greater flexibility in leasing than in owning.

However, renting comes with its own considerations, namely those defined in the relevant lease agreement. This contract between tenant and landlord contains the terms of a tenant’s occupation of a space, and it serves as the governing document for the duration of the lease. Therefore, it’s important to understand the processes and your rights in the event of an Arizona lease termination.

Read on to learn more.

Residential Tenant Rights and Responsibilities

When a landlord and tenant sign a lease agreement, both parties are under obligation for the duration of the lease, typically one year. Landlords cannot raise rent during this time period—unless mid-lease rent changes are provided in the written terms of the lease. Landlords similarly cannot force tenants to move out without a breach of lease. Lease violations include using the residential property to conduct business, throwing raucous parties or lying about a criminal record or past eviction.

There may be other terms listed, which is why it is crucial that prospective tenants review the contract with an experienced real estate attorney before signing on the dotted line. If there is a breach of lease, state law (Arizona Rev. Stat. Ann. § 33-1368) will dictate how to proceed.

When Residential Lease Terminations in Arizona Are Justified

Under normal circumstances, landlords and tenants are bound to a lease agreement for the entire duration of the lease, but there are a few exceptions. These are the four instances in which lease terminations in Arizona are justified.

Domestic violence. Ariz. Rev. Stat. § 33-1318 protects victims of domestic violence and provides early lease termination rights.
Beginning active military duty. Those who enter into “uniformed services” after signing a lease are entitled to early termination. Tenants must provide written notice of intent to terminate the lease for military reasons, and the lease will expire 30 days after rent is next due.
Uninhabitable housing. Tenants who are not provided safe, habitable housing that is up to state and local health codes can be “constructively evicted,” thus terminating the lease. Ariz. Rev. Stat. Ann. § 33-1363 outlines the process for those in this scenario.
Harassment or violation of privacy rights. State law dictates landlords must provide at least 48 hours notice before entering a rental property. Continual violation of these privacy rights, or other harassment like shutting off utilities, is also categorized as grounds for “constructive eviction” as described above.

What to Consider Before Signing a Commercial Lease

There are some similarities between commercial and residential leases, but some considerations are unique to commercial properties. It’s important to understand how commercial leases work and what to look out for when browsing for a space.

For example, net leases refer to lease types that saddle the tenant with the responsibilities of maintenance, operational costs and insurance. These are most typical of warehouses and industrial spaces, but prospective tenants should look for this term in any commercial lease. Parking is a key factor, as parking spaces may be hard to come by and can affect how much foot traffic a business gets.

Commercial tenants should also think about their expansion rights, especially if their business is in a high-growth stage. Commercial leases can last years or even decades, so planning for the future is just as necessary as the present.

Terminating Commercial Leases

One reason to always involve an experienced real estate attorney before signing a commercial lease is to ensure the lease includes a holdover provision. These clauses detail the process of terminating the lease if the landlord and tenant do not sign a formal renewal or extension. Holdover provisions give the tenant plenty of time to vacate the premises and leave on good terms.

In the rare case a holdover provision is not in place and the landlord does not require immediate vacancy of the premises, the tenancy becomes a month-to-month lease. The downside of this shift is that landlords can terminate the lease and give tenants a notice to vacate the premises.

The less friendly version of lease termination results from nonpayment. Tenants in a month-to-month commercial lease are usually not required to be given notice of eviction in the event of nonpayment. However, landlords must give tenants five days to pay rent before they can enter and repossess the premises. Tenants will receive a commercial lockout notice and may have their belongings seized, if a lockout is permitted by the lease or Arizona law.

Find An Experienced Arizona Real Estate Attorney

MacQueen & Gottlieb has significant experience with transactions between landlords and tenants in Arizona. Our firm can review your case and lease agreement, and we can assist you in determining the best course of action to resolve the matter without exposing you to unnecessary legal exposure.